• There does not appear to be any fundamentally strong reason for being long JPY, apart from as a risk aversion play. The market is coming around to this way of thinking.
• USD/JPY still sees very strong bids at 94.75/95.25. Selling interest is also reported above 97.25. Range trading remains likely here in the ultimate economic ‘ugly’ contest, with both currencies currently out of favour.
• EUR/JPY offers are reported around 137.25/50 and bids at 135.25/50. Expect some consolidation here but with model and momentum funds joining the buyers side, further gains look likely (and yes I am talking my book here!).
• If you really want to short one of the JPY crosses as a hedge against other instruments, then consider either AUD/JPY or CHF/JPY. The SNB are intervening to keep the CHF weak and the AUD has raced from .62 cents to .82 cents in double-quick time but is now starting to struggle to make further big gains.